July 12, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

The Packhorse Pastoral Company has raised $62.5 million, and has acquired its inaugural property – Queensland’s Stuart’s Creek – in a $30 million deal. 

Only recently launched in May of this year by Packhorse, Packhorse Pastoral Company Australia (PPCA) is the company’s first foray into a public strategy – born with plans to invest $1.5 billion in Australian ag over the next five years, beginning with a strategy broken down into three stages.

An initial funding target of $300 million has been set to deploy across four to six agricultural properties that will operate mostly under a service delivery model and non-ownership of cattle – meaning the properties will be rejuvenated and leased out to top beef producers for cattle feeding. Through this model the company is aiming to repair the soil with the help of cattle to restore grassland, and by doing so, is targeting an IRR of between 8-10 percent (3-4 percent from yields and 5-6 percent from appreciation).

The restoration of these assets will not only improve the carbon content of the soil, but will then enable PPCA to sell carbon credit offsets at scale in a market expected to be valued at $8.25 billion by 2027, positioning the company as the world’s leading land steward, restorer, and beef supply chain.

Packhorse is currently scouting potential acquisitions between Coonamble in New South Wales and Taroom in Queensland. As part of this process, pastures are assessed and a baseline level of soil organic carbon is calculated by the firm, which then plants trees, grasses, and cultures to introduce specific flora. This, combined with high-density livestock grazing to assist the regenerative process, will result in improved value of the land through an increase in the carrying capacity of each property.

This effort is being chaired by Tim Samway (the chair of Hyperion Asset Management) who has secured cornerstone backing from Terry Snow, the richest person in Canberra and owner of the Canberra Airport, and is being led by CEO Geoff Murrell, the former general manager of Macquarie Bank’s Paraway Pastoral Company.

“Our mission to build the greatest land custodian, land restoration and beef supply chain business in the world is supported by our new shareholders in the company,” said Samway.

“Our investors are acutely aware of the financial opportunities that come with the increasing demand for organizations to become carbon neutral,” he continued. “Packhorse is currently deploying sizable programs to generate carbon credits which have the potential to provide long-term upside for our investors.”

With its mandate in-hand, PPCA has struck out in a big way, acquiring Queensland grazing property Stuart’s Creek through an overall $30 million deal ($27 million for the property and another $3 million for approximately 800 breeding cows and calves) – reflecting one of the largest tickets for a grazing property in the Maranoa region. At 8,360 hectares and located about 45 kilometers northwest of Roma, this price is equal to about $3,230 per hectare, or $1,300 per acre.

Samway told Beef Central, “Stuart’s Creek is premium pastoral land with good water sources and grass cover and satisfies Packhorse’s strict acquisition criteria, which enables the company to meet its environmental and financial obligations through its principles of regenerative agriculture.”

He continued, “Our team, led by Packhorse managing director and experienced cattle property manager Geoff Murrell, is looking forward to realising the land improvement opportunities at Stuart’s Creek and implementing the Packhorse process to achieve optimal biodiversity.”

In May, Samway noted that there is strong interest in PPCA from wealthy individuals (minimum investment is $100,000) and institutions (minimum investment is $10 million), saying, “Increasingly we’re seeing a demand from institutions and wholesale investors for responsible investment products.”

This interest will surely be evident when PPCA engages in its next funding round coming this September. 

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.